Why Debt Consolidation is a Better Option Than Filing For Bankruptcy
Debt consolidation is one of the best solutions to get out of your debt problems.
Often, when a person takes a loan and is unable to repay, it becomes a huge burden in his life, bothering him night and day.
In such a case he can declare himself bankrupt and reduce a significant amount of the repayment.
But the peril of doing such a thing is that he will now be saddled with a bad credit history.
If he wants to take out a loan again, the creditors will be reluctant to help because of the poor credit history.
The best option for a debtor in such a situation is to register with a debt consolidation company.
Here are some of the benefits of consolidating your debt: Lower interest rate Consolidating debt means that the person takes another loan, usually at a lower interest rate, to pay off his debt.
It mostly involves taking out a loan with an asset serving as collateral.
Since the loan is a secured one, the lender will have greater confidence that he will be able to regain his money and therefore will be ready give a lower rate of interest on the loan.
This is especially useful for those struggling with credit card loans, which usually carry a very high rate of interest that makes it difficult for a struggling borrower to meet repayments.
Reduction in debt level Debt consolidation companies are sometimes also able to purchase your loans from existing lenders at a discounted value.
The existing lenders realize that you are opting for consolidation as you are unable to fulfill your obligations in the current form.
To avoid a situation like bankruptcy where they may lose out the whole of the outstanding amount, they sometimes prefer giving the consolidation company a discount.
Planning repayments Consolidation companies can come up with smart solutions to help you manage your financial situation.
First of all, your peace of mind will be restored as you will not be constantly besieged by collection agents.
The debt counsellor will take the state of your finances into account and help you chart out a plan to repay the new loan.
Making debt more manageable You will not have to deal with many creditors as the company will now be your single creditor.
It will eliminate the hassle of having to pay different creditors at different rates.
By utilising the services of a consolidation company you can pay off all your debts as a single payment once every month.
This will make your debt much more manageable and reduce the possibility of a missed payment.
You will know exactly how much you owe every month and you can plan the rest of your budget accordingly.
The biggest benefit of carrying out debt consolidation is that it will not have a huge negative impact on your credit history and you will be able to avail a new loan when you need one in future.
Often, when a person takes a loan and is unable to repay, it becomes a huge burden in his life, bothering him night and day.
In such a case he can declare himself bankrupt and reduce a significant amount of the repayment.
But the peril of doing such a thing is that he will now be saddled with a bad credit history.
If he wants to take out a loan again, the creditors will be reluctant to help because of the poor credit history.
The best option for a debtor in such a situation is to register with a debt consolidation company.
Here are some of the benefits of consolidating your debt: Lower interest rate Consolidating debt means that the person takes another loan, usually at a lower interest rate, to pay off his debt.
It mostly involves taking out a loan with an asset serving as collateral.
Since the loan is a secured one, the lender will have greater confidence that he will be able to regain his money and therefore will be ready give a lower rate of interest on the loan.
This is especially useful for those struggling with credit card loans, which usually carry a very high rate of interest that makes it difficult for a struggling borrower to meet repayments.
Reduction in debt level Debt consolidation companies are sometimes also able to purchase your loans from existing lenders at a discounted value.
The existing lenders realize that you are opting for consolidation as you are unable to fulfill your obligations in the current form.
To avoid a situation like bankruptcy where they may lose out the whole of the outstanding amount, they sometimes prefer giving the consolidation company a discount.
Planning repayments Consolidation companies can come up with smart solutions to help you manage your financial situation.
First of all, your peace of mind will be restored as you will not be constantly besieged by collection agents.
The debt counsellor will take the state of your finances into account and help you chart out a plan to repay the new loan.
Making debt more manageable You will not have to deal with many creditors as the company will now be your single creditor.
It will eliminate the hassle of having to pay different creditors at different rates.
By utilising the services of a consolidation company you can pay off all your debts as a single payment once every month.
This will make your debt much more manageable and reduce the possibility of a missed payment.
You will know exactly how much you owe every month and you can plan the rest of your budget accordingly.
The biggest benefit of carrying out debt consolidation is that it will not have a huge negative impact on your credit history and you will be able to avail a new loan when you need one in future.
